Investors see solid foundations in housebuilders…

Tuesday, 6 September: Housebuilders did their best to lead the FTSE indices higher, but stocks in London were mixed through the day due to a slip in oil trading and a downgrade of Standard Chartered prompting an indiscriminate fall in oil majors and banking stocks. The FTSE has underperformed European bourses in the week thus far, as Sterling has enjoyed multi-week highs against both the euro and the dollar.

Redrow jumped higher(+9%) on release of its final results. The FTSE 250 developer reported a 23% rise in fiscal 2016 pretax profit, its third consecutive year of record earnings after selling more houses at higher prices. It added that sales in the first 10 weeks of the new fiscal year were very encouraging, and up 8% on a strong comparator last year – no sign of Brexit-related weakness was acknowledged. The average selling price was 7% higher at £288,600. Berkeley Group(+3.5%) and the former helped house builders on the whole higher as Berkeley announced that pricing was resilient, with reservation cancellation rates at normal levels, following a temporary & expected surge in the aftermath of the Brexit vote.

Sports Direct International(+5.1%) found favour with investors after pledging to improve labour practices that had been denounced by lawmakers and the media. The firm conducted its own review on working practises, and issued an apology for the shortcomings identified. In light of the review, it will also offered directly employed casual staff on zero hours contracts the opportunity to become permanent employees.

Contrary to recent data releases, it seems the first signs of slight post-Brexit weakness may have reared its head. British shop prices fell at a faster rate in August, as they slipped by 2% in August compared with 1.6% in July, according to the British Retail Consortium(BRC). Food prices also dropped 1.1% from 0.8%. However, slowing prices are not expected to persist as the devaluation of Sterling is largely expected to ‘import’ inflation into the UK economy in the coming months.

At the close European indices were mixed with the FTSE 100 -0.78%, the CAC 40 -0.24%, and the DAX 30 +0.14%.